Trencor calls for shareholder action

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Trencor calls for shareholder action

Published Date: 2019-10-15 | Source: Stephen Gunnion | Author: Stephen Gunnion

Trencor calls for shareholder action

The investment group wants shareholders to alert it to any tax exemptions ahead of a vote on its Textainer unbundling.

Trencor has urged shareholders to notify it of any dividends tax exemptions or reduced rates of dividends tax they are entitled to as it prepares to unbundle its shares in US container group Textainer.

The investment group plans an inward listing for Textainer on the JSE, before distributing its stake to shareholders as a dividend in specie. Unlike a cash dividend, where shareholders bear the tax liability, Trencor said it would be liable for any tax on the distributed shares. It said it was imperative that shareholders provide it with the required declarations and undertakings so it could determine its liability on the unbundling. By not getting the full benefit of any exemptions and reduced tax rates available to shareholders, its net asset value per share would decrease and the 'increased' dividends tax cost would ultimately be borne by all shareholders as it would have less funds for future distribution.

Trencor deconsolidated Textainer at the start of last year due to the onerous requirement of converting its US GAAP results into International Financial Reporting Standards, as required by the JSE. It didn't pay a final dividend last year so it could preserve cash ahead of the inward listing of Textainer. And it didn't declare an interim dividend this year either. By listing the business on the JSE and unbundling its stake to shareholders, it hopes to simplify its interests and unlock value for investors.

Shareholders will be asked to vote on the proposals at a general meeting on 18 October. If the listing goes ahead, they will get 15.7 Textainer shares for every 100 Trencor shares. The unbundling is expected to occur on 17 December

The company said the required forms were available on its website: www.trencor.net and should be returned by email to forms@trencor.net by 17 October.

Its shares rose 1.2% to R29.70 yesterday.





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